The European Parliament has appointed a regulator for Bitcoin and cryptocurrency. In the end, these efforts will be futile, as the decentralized nature of the Bitcoin protocol is resistant to external influence.
EU Parliament Seeks a Crypto Watchdog
The European Parliament and ECB are not on the same page regarding Bitcoin. A few weeks ago, there was a special four-day event to discuss the future of cryptocurrency in Europe. The outcome of that meeting was to not introduce further Bitcoin regulation for the time being.
“The ECB sees no imminent risk, as long as the volume of virtual currencies is stable and their usage is not widespread,” reads an EU Parliament briefing.
On the other hand, members of the European Parliament seem convinced there is a need for a cryptocurrency watchdog. Similar to other regions of the world, they want to monitor Bitcoin regarding money laundering and terrorism funding. Such a watchdog would be used to monitor suspicious Bitcoin activity.
Although this is only a proposal, it sets the tone for the future of Bitcoin in Europe. The resolution was drafted by Jakob von Weizsacker, a German social democrat. If this proposal is approved, the European Commission will oversee the watchdog. However, they would need to build expertise in the technology powering the Bitcoin protocol as well.
Leaving Room For Growth & Innovation
This proposal is not overly positive news for Bitcoin and blockchain in Europe, but there is no reason to panic yet. The proposal mentions how a heavy-handed approach needs to be avoided, as Blockchain technology can offer “significant opportunities” for consumers and economic development.
Jakob von Weizsacker stated in his proposal that:
To avoid stifling innovation, we favour precautionary monitoring rather than pre-emptive regulation. But IT innovations can spread very rapidly and become systemic. That’s why we call on the Commission to establish a taskforce to actively monitor how the technology evolves and to make timely proposals for specific regulation if, and when, the need arises.
The vast majority of European Parliament members are in favor of this proposal. The voting process saw 542 votes for, and 51 against, with 11 abstentions. It is important to keep in mind these numbers mean little, though, as it is up to the European Commission to consider this proposal.
Speaking of which, the European Commission is looking at the current regulatory guidelines for cryptocurrency exchanges. For the time being, this only relates to the existing AML directive in the European Union. But this new proposal could impose additional requirements, such as undertaking due diligence for every customer.
European Parliament Can’t Regulate Bitcoin
These efforts by the European Parliament do not change the fact Bitcoin itself can’t be regulated. All these proposals can do is affect companies involved in Bitcoin trading. But that does not mean the Bitcoin protocol itself can be regulated, as there is no central control or overarching body to control.
It is commendable to see the proposal mention innovation should not be stifled. Blockchain and Bitcoin can bring a lot of positivity to the financial sector in general. However, the push towards regulation seems to contradict the desire to achieve innovation. Simply put, Bitcoin was designed to be immune to any outside influence, particularly the government.
What are your thoughts on this new European Parliament proposal? Let us know in the comments below!
Source: City A.M.
Images courtesy of the European Parliament, Shutterstock